Expected utility or prospect theory maximisers? Assessing farmers' risk behaviour from field-experiment data

Bocqueho G, Jacquet F, & Reynaud A (2014). Expected utility or prospect theory maximisers? Assessing farmers' risk behaviour from field-experiment data. European Review of Agricultural Economics 41 (1): 135-172. DOI:10.1093/erae/jbt006.

Full text not available from this repository.

Abstract

We elicit the risk preferences of a sample of French farmers in a field-experiment setting, considering both expected utility and cumulative prospect theory. Under the EU framework, our results show that farmers are characterised by a concave utility function for gain outcomes implying risk aversion. The CPT framework confirms this result, but also suggests that farmers are twice as sensitive to losses as to gains and tend to pay undue attention to unlikely extreme outcomes. Accounting for loss aversion and probability weighting can make a difference in the design of effective and efficient policies, contracts or insurance schemes.

Item Type: Article
Uncontrolled Keywords: Risk preferences; Experimental economics; Loss aversion; Probability weighting; France
Research Programs: Ecosystems Services and Management (ESM)
Bibliographic Reference: European Review of Agricultural Economics; 41(1):135-172 (February 2014) (Published online 8 May 2013)
Depositing User: IIASA Import
Date Deposited: 15 Jan 2016 08:51
Last Modified: 25 Feb 2016 11:56
URI: http://pure.iiasa.ac.at/11021

Actions (login required)

View Item View Item

International Institute for Applied Systems Analysis (IIASA)
Schlossplatz 1, A-2361 Laxenburg, Austria
Phone: (+43 2236) 807 0 Fax:(+43 2236) 71 313